Lord Hunt of Kings Heath: My Lords, recent studies suggest that the prevalence of autism in children under eight is approximately 60 per 10,000 and that a more narrowly defined autism is 10 to 30 per 10,000 children under eight. I accept that more always needs to be done to help those people with autism, and their parents and families, and I well understand the pressures on those families. We are working to take forward a programme of work in relation to a prevention agenda, better access to services and dealing with education for professionals, to which the noble Countess referred.

Lord Chidgey: My Lords, the Minister may be aware that the Demos report, too, states:
	"The United Kingdom boasts a strong tradition of international cultural exchange through the British Council's presence around the globe".
	It also makes the point that we cannot afford to rest on our laurels. In 2005-06, the British Council was considering closing teaching centres in Istanbul and four other cities where public diplomacy benefit was thought to be "not that considerable". This year, the British Council will be closing several other regional offices because of the reduction in numbers of Government-funded overseas scholars coming to the UK. What assessment have the Government made of the effect of this withdrawal from locations around the globe in terms of the loss of benefit that their presence was and is bringing to the United Kingdom's overall cultural policy?

Lord Hunt of Kings Heath: My Lords, the question of how the Government should express principles to inform practitioners making decisions under the 1983 Act as amended by the Bill has dominated our discussions and caused a great deal of interest, as evidenced this afternoon.
	On Report I said that I would introduce an amendment at Third Reading to address the concerns raised. I pay tribute to noble Lords on all sides of the House who have taken part in discussions on this. I very much appreciate their co-operation and help. We first opened our discussions on the Bill in Committee on Monday 8 January. Understandably, the question of principles is very important. The Bill has been the subject of a great deal of debate both in your Lordships' House and in the community, among mental health patients and stakeholders, and it is not surprising that, with so many varied views about the legislation, the principles under which it will operate have been a matter of great interest and concern.
	As noble Lords will know, the Government have no argument, and have not had any argument, with noble Lords who emphasised the importance of transparent principles to govern the behaviour of professionals. The problem all along for the Government was the technical difficulty of grafting new principles on to existing legislation, in contrast to the approach in Scotland, for example, where they started from scratch, or the "long" Bill, which we have discussed often during the passage of this Bill. Our amendment responds to the technical problems in noble Lords' original amendments, and I hope that it answers the question posed by the noble Earl, Lord Howe, when he opened the debate on Report. The noble Earl explained that his amendment would provide for a clear statement from Parliament about the values that should inform and guide practitioners. This amendment achieves that.
	The noble Baroness, Lady Barker, asked that we had a clear explanation of how the code of practice and the legislation work together so that practitioners were not confused. I readily agree with her that it is very important that practitioners who will work under this legislation and the code of practice are very clear on what is required of them. The request for transparency is clearly very important, which is why our amendment also relates to the interrelationship between the legislation and the code of practice.
	Our amendment places in statute a new requirement that the Secretary of State and Welsh Ministers include a statement of principles in the respective codes of practice for England and Wales, which should inform decision-making under the 1983 Act. The amendment legally obliges the Secretary of State and the Welsh Ministers to address certain fundamental issues in preparing this statement of principles. It also enshrines in legislation the duty of practitioners to have regard to the code in performing their functions under the Act, as elaborated by the judicial arm of this House in the case of Munjaz.
	We listened to the debate on this issue very carefully. It is clear that there are certain values that this House regards as fundamental in the exercise of powers under the Act. We share those views and have given careful thought to those fundamental values and how they might be most effectively brought to bear in the context of the Act. We have included them as matters that must be addressed in preparing a statement of principles to be included in the code of practice for England and Wales. That will ensure that the key values expressed in Committee and on Report are given effect.
	I need not go through the entire list of issues, as they are self-explanatory, but perhaps I might comment on two of them. In Committee, the noble Lord, Lord Williamson, drew attention to the importance of patients participating as fully as possible. Indeed, much of the debates around principles focused on the benefits and desirability of patient autonomy. That is why the fundamental issues include respect for patients and involvement of patients in planning, developing and delivering care and treatment appropriate to themselves. That will support the best practice of considering the past and present wishes and feelings of patients and treating them with dignity to improve their well-being.
	We listened to the concerns raised in the House, including those of the noble Lords, Lord Adebowale, Lord Bragg and Lord Patel of Bradford, regarding the treatment of black and minority-ethnic groups. A number of noble Lords have pointed it out at various stages of the Bill, and we agree that there is evidence of disproportionate use of detention, seclusion and restraint for patients from a black and minority-ethnic background. As I stated in previous debates, we are addressing this issue through Delivering Race Equality, in England, and the Race Equality Action Plan, in Wales. But we will include a requirement to address unlawful discrimination. That is up front in the legislation as a fundamental matter that must be addressed in the principles to guide practitioners.
	We have listened carefully to Peers' concerns regarding the legal effect of these principles and the code generally, in particular those of the noble Lord, Lord Carlile. As I said, the status of the code has been reviewed by the judicial arm of this House in the case of Munjaz. In the light of that case, no one should be under any illusion that principles expressed in the code can lightly be ignored. They must be properly and carefully considered. We have given effect to this in the duty of practitioners to have regard to the code, a duty that must and will continue to be read in the light of Munjaz.
	We support the idea of principles and we believe that the implementation of the legislation should be undertaken in a principled manner, but there are serious difficulties with grafting new principles on to existing legislation. That is why we think that the code of practice is the best vehicle to convey those principles to inform practitioners' decisions under the Act. I hope that this amendment convinces noble Lords that we are serious and that we agree with the sentiment behind the amendments tabled in Committee and on Report. We have listened carefully to noble Lords. I hope that we reach a satisfactory conclusion of very constructive debates in your Lordships' House and outside on the critical area of principles. I beg to move.

Earl Howe: My Lords, I express my personal and very considerable appreciation for the Minister's constructive approach to this important issue following our debates at earlier stages of the Bill and for the efforts that he has personally made in helping to frame the amendment now before us. I also thank him for facilitating discussions between noble Lords on this side of the House and the Cross Benches and members of the Bill team over the past two weeks, and for his willingness to allow some of our suggestions to be incorporated in the wording of the amendment. At the start of Committee I frankly did not think that we would reach this position. Without the Minister's commitment that simply could not have happened.
	I am sure that the Minister will not take it amiss if I say that what we have here is not perfection. Perfection, from our point of view, would have been a set of clear, overarching principles in the Mental Health Act. For reasons that we know about—mainly practical and legal ones—the Government did not feel that this idea could be taken forward. I was sorry about that but, given that this was how they felt, this amendment represents a more than acceptable second best, which should achieve much of what we were hoping to achieve through our amendment in Committee. In particular, it demonstrates to service users and professionals in mental healthcare that Parliament has put its imprint not only on the code, which is, of course, important, but also on the Act itself as regards the basic principles that should govern it and be read into it. It is a message that Parliament itself rather than officials, managers or doctors, regards the subject headings set out in proposed new subsection (2B) of the amendment as matters of universal applicability in the way that the Mental Health Act is to be interpreted and implemented. That signal should be understood within the framework of our earlier debates, when noble Lords spoke of the values that should permeate decisions and actions taken under the Act and what those values should be. I hope that the Minister will agree with that broad analysis. From his remarks, I believe that he does.
	If we are to embrace this amendment, we need to do so with our eyes open. Although the Secretary of State is bound by the amendment to act in certain ways, we can see that much of what happens will depend on his or her own opinions and decisions. That aspect of the drafting is less tight than I would have liked; nevertheless, we should not overlook the considerable significance of subsection (2D), which expressly binds the code of practice and the implementation of its principles into the Act. That is a major plus.
	Perhaps I may put some brief questions to the Minister on the detail; if he cannot reply today, I would appreciate it if he could do so in writing later. Can he confirm that when the principles in the code are drawn up, the language used will reflect the intention and the underlying sense of each paragraph in subsection (2B)? We do not want to see any watering down of the principles when they are translated into the code; for example, the "wishes and feelings" of patients should include the past and present wishes and feelings, as the amendment specifies, and should not be taken to mean something more general or nebulous. "Minimising restrictions on liberty" should encompass the inclusion of a preference for informal care over compulsory care unless compulsion is absolutely necessary in the circumstances of the case. It should include also the idea of least restriction, once a person has been compulsorily detained.
	I welcome the principle of,
	"involvement of patients in planning, developing and delivering care and treatment appropriate to them",
	but we need to be sure that, when it is incorporated into the code, it conveys what I hope the Government intend: that the individual patient should, as a matter of course, be consulted on the care and treatment that is right for him and his opinions should be respected.
	The "avoidance of unlawful discrimination" should not be taken simply as prohibition of an obvious, negative kind, but rather as a positive rallying call for respect and equal treatment of all patients, no matter what their characteristics or background may be. This principle is about banishing the culture of stereotyping in mental health care and about promoting in its place a culture of respect and confidence.
	Proposed paragraph (e) refers to the "effectiveness of treatment". This idea is somewhat condensed. I would like to think—and perhaps the Minister could comment—that it opened up the concept of maximum benefit to the patient, which our original amendment specified. In so far as there is an interaction between this principle and the principle of respect for the patient's wishes and feelings, the concept of maximum benefit would appear to be covered.
	One of the principles that we had hoped to be included, but that is not there, is the need to consider the full range of options available in the patient's case, both during assessment and after. Can the Minister confirm my understanding, arising out of helpful discussions with officials, that this principle is effectively covered by considering three principles together: the need to respect the patient's wishes and feelings, the principle of minimum restriction and the effectiveness of the treatment considered? If one were to overlay those principles with the Secretary of State's duty to ensure the equitable distribution of services, the substantive point at issue would seem to have been addressed. If that is so, will the Minister undertake to ensure that that is made explicit in the code?
	The amendment refers also to the Secretary of State's duty to,
	"have regard to the desirability of ensuring ... the efficient use of resources".
	I am sure that none of us here would deny her that responsibility in the general exercise of her functions. However, one could envisage circumstances whereby the need to make efficient use of resources could be used as a reason for diluting or even negating the practical force of the main principles. That would be highly undesirable. Can the Minister explain what is intended by the "efficient use of resources" in that context?
	I hope that the Minister can also confirm that the principles foreshadowed and signposted by this amendment will be the only ones to be contained in the code and that no extraneous ones will creep in. Does he accept that the amendment confers a special status on to the principles set out in the code such that any departure from them would be unlawful and therefore, in practice, unthinkable?
	As this may be the last opportunity to do so, I end by expressing my appreciation for the courtesy and helpfulness of the Minister throughout the passage of the Bill. He has never been less than utterly straightforward and equable, even when, regrettably, we had to disagree. I thank him for that. If he will allow me to say so, I cannot help being fearful that the same spirit of open and constructive engagement may not be carried over into the debates in another place. Last week the Minister's right honourable friend Rosie Winterton made several public pronouncements about the effect of the amendments carried by your Lordships' House that were, to be frank, grossly misleading. I stop short of saying that they were wilfully misleading because I have no grounds for going that far, but the Minister was certainly ill briefed. This is not the moment to issue a line-by-line rebuttal of what she said, but I hope that it will be in order for me to do that by way of a letter before the Bill has its Second Reading in the Commons.

Baroness Barker: My Lords, I thank the Minister very much for his efforts over the past few weeks to enable me, the noble Earl, Lord Howe, and others to meet the Bill team and parliamentary counsel. I have never had the experience of meeting parliamentary counsel before and it was extraordinarily helpful that we did so, not least because members of the legal profession are often wont to say things by omission rather than put things expressly in terms. It was very helpful to learn directly from them exactly what was meant by omission in the wording.
	This amendment is a compromise and, as such, it is unlikely to satisfy anyone. There are things that we would have wished to see in it and there are things that we would rather were not there, but, like the noble Earl, Lord Howe, I accept that this may be as good as we will get. Others—in which I include my noble friend Lord Carlile, who is unable to be here today because he is unwell—are less than happy. They have carefully read the wording of the amendment and are firmly of the view that it offers no legal protection whatever.
	The noble Earl, Lord Howe, has already referred to the remarkable speech made by Rosie Winterton on 1 March. As one would expect, I disagree with much of it, but on one point we are in agreement. She said that mental health legislation is an extremely difficult and sensitive issue. So it is, and that is why I do not apologise for asking the noble Lord a series of questions to which I, too, require answers.
	People making decisions under this provision are to,
	"have regard to the code".
	As I mention that, I notice that the noble Lord, Lord Campbell of Alloway, is in his place. Today, it is our duty to probe the Minister on exactly what those words mean. In particular, do the Government not intend there to be a right to disapply the principles in certain circumstances? I ask that because that was a provision of the 2004 Bill. I am sure that the Minister will be only too well aware that that proposal was firmly rejected by the joint scrutiny committee, so it would be very helpful today if he could answer that point.
	The Minister will recognise that the amendment gives a status to the principles in the code. Does that mean that they cannot be departed from? If they can be departed from, can he tell us how and in what circumstances?
	Does the Minister agree that minimising restrictions of liberty means that voluntary treatments should be preferred over compulsory ones? That argument has run throughout our deliberations and I should welcome a statement from him on it.
	Like the noble Earl, Lord Howe, I should like confirmation that the principle of "efficient use of resources" cannot be used to deny or frustrate the application of the other principles. That leads me to one further point.
	We have in front of us a list. That, in itself, is extraordinary: lawyers hate lists, as we are told all the time. Can the Minister confirm that there is no order of precedence in this list and that there is no interplay between the different principles, but that they all have an equal weighting and an equal value? I ask that in order to address the point made by the noble Lord, Lord Soley, about determining the exact words of the code of practice and the relationship between the two. I disagree with him—that will be no surprise to him after the past three months of deliberation. I do not think that lawyers should determine the meaning; it should be a matter that returns to Parliament.
	That leads me to another point. The amendment amends Section 118 of the Mental Health Act 1983. Under that section, amendments to change the code come under a negative procedure. Does the Minister agree that this matter is of such importance and has been given such detailed attention in your Lordships' House that any review should be by a positive procedure? Will he please explain how the Secretary of State will arrive at a judgment about whether action should be taken under the code of practice? Will there need to be evidence, and will such decisions by the Secretary of State be subject to judicial review?
	I have some further points to make. I rebut firmly one charge made by Rosie Winterton in her speech on 1 March, using arguments and phrases that we have heard a lot in the past few months—principally from the Government's mental health adviser. She said of your Lordships' House that we had not put the public at the heart of our deliberations. That is completely and utterly wrong. Even a cursory neutral reading of the proceedings of our debates would show that they have been lengthy, well informed and not without a great deal of argument. They have always been predicated on the understanding that mental health legislation exists to protect patients and the public, and that there will always be a need for compulsory treatment within such measures. Your Lordships' House is entitled to reject utterly and completely that accusation, which is false and without basis.
	We have considered all the information and evidence before us—including that put forward by the Government—to put together legislation that we believe will lead to services that mental health patients will not fear, and from which they will not run. In so doing, we will make this country safer because we will not leave people who are very ill outwith the social services to become more ill and a danger to themselves and others. That has been our central consideration on the Bill.
	I too thank the Minister and the noble Baroness, Lady Royall, who in very difficult circumstances and with unhelpful noises off have sought to approach the matter in the spirit of your Lordships' House by being unendingly courteous and helpful to those of us who have worked on the Bill—at no mean cost to themselves. We would not have managed to improve the Bill as we have done had they not been in charge of it, so I congratulate them.
	When the Bill came to the House on Second Reading it was welcomed by many noble Lords who, at the same time, called it deficient, depressing and fundamentally flawed. It is still flawed, but it is a much better Bill than the one that we received. I hope that when it goes to another place, Members, in the spirit of this House, will pass legislation that is strengthened rather than weakened, and which will make this country a safer place for the people who are mentally ill and for all those who care for them.

Lord Alderdice: My Lords, the Minister has rightly been recognised for his commitment to the Bill and his work with all of your Lordships to improve what came to your Lordships' House. It was not, in that sense, his Bill; he inherited it. He has worked hard with us, as has his colleague, to make things better.
	I still find myself a little heavy hearted about the Bill, however. A few days ago, a substantial document dropped through my letter-box with a covering letter from Professor Roy McClelland, who is now chairing the Bamford review of mental health and learning disability services in Northern Ireland. That document was a volume of legislative proposals for Northern Ireland. From the beginning, it set out that mental health legislation should be based on fundamental principles, particularly those of the protection of the human rights of the whole community, but particularly those who were to be held and treated under compulsion.
	That review, in the Northern Ireland context, brought together a wider range of people, patients, carers, professionals and officials than had ever been done. It mirrored what we have heard when NGOs, carers, people involved in healthcare and patients and their families have expressed their views: they want the legislation to be based on fundamental principles. The Minister will undoubtedly say that it is. Well, perhaps, but reading through this I had the impression that if the officials who had put the material together had been advising the Almighty when he was looking down on Sinai, Moses might have come down with something saying, "The high priest will address questions like murder, theft, respect for the Sabbath and for one's parents, but only in the context of what is efficient and potentially effective". I do not think that the right reverend Prelates would be espousing their faith and convictions with quite the passion they do if that had been before them.
	I ask myself why the Government have been so adamant that the principles should not be in the Bill, clear and irrefutable. It is said that it is for legal reasons. Lawyers make good servants but bad masters. When I listen to what my noble friend Lord Carlile has said—and I am sorry that he is unable to be with us today—I am affirmed in my view that there is something rather more to it. In this, the noble Lord, Lord Soley, has, as ever, been deeply helpful to the House. He has pointed up the real reasons why the principles cannot be put in the Bill. One reason is that a fundamental principle is an attention to the concern of constituency MPs about the problem of the complaints they receive about difficult people. That is one of the fundamental principles that underlie the Bill. Secondly, one of the reasons for putting these matters in a code of practice in a slightly indefinite way is that it makes them non-justiciable if someone challenges them—here the Minister may be able to put my mind at rest and tell me that I am wrong. The noble Lord, Lord Soley, said that we do not want them challenged because it is very expensive for the NHS. It is, and it is just as expensive for any poor patient, family or carer to confront the courts, but they do not have the resources. One of the things this House is here to do is to protect those who do not have resources or power against those who do, and sometimes that is government. If that is why these matters are not in the Bill, it is not satisfactory and does not give me great comfort.
	Singularly in the field of healthcare, this legislation is about compulsion. It is about compelling patients to be where they do not want to be and to take treatment they do not want to take in a context that they do not like. It is also about compelling healthcare workers to do things they must not want to do. Why do I say that? I say it because the Minister made it clear at an earlier stage in the Bill. When I observed that much of the care required by people with disturbed personalities was unavailable because of resources issue, the Minister was at pains to point out that it was a matter of compelling and pressing healthcare workers, particularly psychiatrists, to treat people who they were saying were not treatable. Many psychiatrists will find that difficult to take. It is a serious accusation that, effectively, they have another agenda rather than a commitment to the care of their patients. I do not believe that that is true in the majority of cases. Compulsion as regards carers, those giving treatment and the patients must be taken extremely seriously. I entirely accept and support any compulsion on psychiatrists and others to ensure that they observe the rights of black and minority-ethnic community patients and, indeed, the rights of patients as a whole, but that is not what is being proposed.
	I said earlier that I still have a somewhat heavy heart. The Bill is better than before and better than nothing, and we can be grateful for the thoughtful, courteous and respectful way in which Ministers in this House have dealt with genuine concerns and with the material before us. I hope that they have more influence than us to persuade their colleagues in another place to adopt the same approach so that the advances that have been made in the Bill, which are genuine improvements, are maintained and built upon rather than taken to pieces.

Lord Hunt of Kings Heath: My Lords, it is always a pleasure to listen to an intervention from the noble Lord, Lord Campbell of Alloway. Some noble Lords will have enjoyed his many interventions on the question of codes of practice and Section 7 statutory guidance with a great deal of interest.
	I welcome the constructive comments noble Lords have made this afternoon. In essence, we are debating a compromise. Inevitably, compromises do not completely commend themselves to all noble Lords. It is, however, good that we have reached an accommodation on the issue of principles. I have always thought that, if we were able to do so, that would ensure, as the noble Earl, Lord Howe, said, a very important message is being given out regarding parliamentary scrutiny and the importance that Parliament places on the principles that appear in the amendment. That is a very important signal, and I thank all noble Lords for it.
	The noble Earl, Lord Howe, invites me to give a guarantee that the principles will not be watered down and that we will not use nebulous language. I will try to do that. I make it clear that we wish these principles to be absolutely transparent and to mean something to the practitioners who have to operate what is, in every sense, difficult legislation in difficult circumstances.
	I will come on to talk about how further consultation will take place, but I want to reassure the noble Earl, Lord Howe, that we wish the code to be as clear as possible and to embrace the principles. We are taking note of all comments made in the discussion on legislation. We have a draft code, but it is very much work in progress. I can give an absolute assurance to noble Lords that everything stated in our debates will inform the production of the draft code when it comes up for full parliamentary scrutiny.
	I agree with the analysis of the noble Earl, Lord Howe, about the full range of options. He then went through a number of the principles contained within the amendment and he was absolutely right.
	I thank the noble Lord, Lord Alderdice, for his acknowledgment of the work that has been done. I understand that it does not meet all that he wants to be met. There is no more to it than the explanation I have given at all stages of the Bill as to why the principles cannot be put in the Bill in the way he wants. There is no hidden agenda. He said, absolutely rightly, that lawyers act under the instructions of their client. But when the advice given to the Government on the matter has been so clear, the last thing we want to do, in the light of everything noble Lords have said about the need for clarity, is to cause confusion regarding interpretation. That is the only reason we were not able to accept the kind of amendments which the noble Lord would have wished to see.
	The proposed provision,
	"the efficient use of resources, and ... the equitable distribution of services",
	means merely that in carrying out functions under the Act practitioners, should consider the efficient use of resources and the equitable distribution of services. This line in the amendment ensures that these broader aspects of service delivery are considered as well as the more individualistic considerations that are to be addressed in the statement of principles. When preparing the statement of principles, the Secretary of State should draft it in such a way that, where she considers it desirable, it addresses the efficient use of resources and the equitable distribution of services.
	The noble Baroness, Lady Barker, asked whether there is a preference for the list of fundamental matters. There is none.
	I listened with a great deal of interest to the noble Lord, Lord Ramsbotham, who has such wide experience in relation to prisoners.
	The Act deals with patients transferred from prison to hospital for treatment; it does not cover treatment for prisoners with a mental disorder where that treatment is not required to be given under compulsion. The issue raised by the noble Lord therefore does not arise in the principles relating to the Act, but his general point is well made. I have been very clear that part of the health service's general role is to treat prisoners, and the changes that have been made to its responsibility are to be greatly encouraged and welcomed.
	I have also referred to our debates on prisoners waiting for a place in NHS institutions. We have invested more resources. There is clearly a huge challenge here, which I do not underestimate; but we are at one with the noble Lord on the crucial importance of this area. We must ensure that there is continuity of service when prisoners are discharged. Given the scale of mental health issues among prisoners, it is vital that there is continuity of service and that the health service is geared to meeting the health needs of former prisoners. Again, the active intervention and involvement of the National Health Service is very important in that matter.
	On the question of whether the Secretary of State's decisions on what the principles are are subject to judicial review, my advice is that they are. The noble Baroness, Lady Barker, asked again about the status of the code and whether the principles can be departed from. The answer is yes, but only where there are cogent reasons for doing so that are demonstrably justifiable. That is consistent with the decision being proposed in relation to Munjaz.
	I pay tribute to the noble Baroness for mentioning Scotland again. I will write to her in some detail, if I may, about the specific issues that she raises, but the general point is that the principles apply to patients who are transferred using the cross-border arrangements once they are under the English Act and to all functions dealt with in the code. She raised a rather more general issue when she said that, where we are dealing with people's liberty, there should be no separate approach between England and Scotland. I understand what she is saying, but in a sense we are governed by devolution legislation and must act within those parameters. She has signalled the fact that, in those circumstances, it is very important that, first, there is clarity and transparency in cross-border arrangements and that, secondly, whatever the different approaches taken by Scotland, England and Wales to mental health legislation, we must ensure that there is as much collaboration as possible.
	It is also very important that we learn lessons from the introduction and implementation of different legislation. Noble Lords have pointed out to me the benefits of Scotland's approach to its legislation, but I would say to them that it is also important to look at some of the practical challenges that are being faced in Scotland; I do not want to repeat the various letters that have appeared in the medical press recently from Scottish practitioners about some of the issues that they face. I do not seek to criticise legislation in Scotland, but I do think that, whether we are talking about English legislation or Scottish legislation, we need to be aware of some of the impact of our legislation on the practical, day-to-day business of practitioners. In a sense, that brings us back to the importance of the code of practice in ensuring as much clarity as possible in giving advice and guidance to practitioners.
	The noble Baroness, Lady Barker, asked me about Section 118 and whether it ought to be subject to the affirmative or negative procedure. I was surprised that we did not have an amendment on that. As she suggested, it is currently under the negative procedure, and the Delegated Powers Committee did not recommend that that should be changed to the affirmative procedure. When the code of practice is laid before Parliament we may well have a debate on it, and I would welcome such an important debate. The very fact that it is subject to parliamentary scrutiny emphasises the importance of the code of practice.

Baroness Walmsley: My Lords, I start by echoing the thanks of the noble Baroness, Lady Morris of Bolton, to all the organisations that have briefed us during our consideration of the Bill. We on these Benches have moved somewhat from our original position because we have listened to the well informed briefings that we received. However, there remain to the last minute a number of concerns. From the start, we have supported the noble Lord, Lord Dearing, in his efforts on the various things that he just outlined. I also echo his welcome for the ways in which the Government have moved on the issue of franchising and the various safeguards that have been put in place. We are very pleased to see those in the revised version of the draft criteria for foundation degree-awarding powers that we recently received.
	However, we share the concerns of the noble Lord, Lord Dearing, about progression. I notice that paragraph 35 of the revised draft criteria about flexibility states: "These requirements may include"—I emphasise "may include"—
	"flexible progression routes, including links with other professional awards and with at least one identified honours degree programme".
	Like the noble Lord, Lord Dearing, we would prefer to see a requirement in the Bill. I notice that at the end of the first section of the draft criteria, the Minister says:
	"The Government is reflecting further on whether a requirement for FE institutions that gain the power to award foundation degrees to put arrangements in place for students to progress to full Honours degrees should be included in primary legislation".
	We on these Benches still feel that at least one progression arrangement should be included in the Bill, and we hope that the Minister will be able to assure us today as to what the Government intend to do about it.
	Like the noble Lord, Lord Dearing, we believe that it is not only important that at least one progression path should be available, but that it is desirable for a whole lot of partnerships to be in place. However, the fact that there is at least one university prepared to accept the foundation degree delivered in this college as an appropriate foundation to move on, after another 1.3 years of study, to that university's honours degree is a valuable endorsement from that university about the quality of the foundation degree in question. That is an important aspect of this whole issue and it is part of the reason why we would prefer to see it included in the Bill.

Baroness Warwick of Undercliffe: My Lords, I support the amendment tabled in the name of the noble Lord, Lord Dearing, to which I have added my name. I declare an interest as chief executive of Universities UK.
	It would be remiss of me not to say that it remains my view that it is a mistake to extend foundation degree-awarding powers to colleges, but the Government have made some very important improvements to the Bill during Report. As the noble Lord, Lord Dearing, said, the Minister has very helpfully provided additional information alongside our debates in the form of draft guidance and an explanation of how the measures outlined in what is now Clause 17 will work. That detail has provided substantial reassurance to those of us who have serious concerns about what the impact of these measures is likely to be.
	The amendment asks the Government to go further in two respects, the first being to make it plain in the Bill that securing progression arrangements will be a prerequisite for colleges wishing to apply for their own foundation degree-awarding powers. We have debated the importance of this issue at length in this House, and I do not need to rehearse the arguments that the noble Lord has already made.
	The second issue is franchising. I appreciate the improvements that the Minister has already made to the Bill by giving the Privy Council the power to grant foundation degree-awarding powers without the power to franchise provision. I understand the approach that he has taken, which is to suggest that this power be withheld for the probationary period of six years, set out in the draft criteria for the new degree-awarding powers. I understand, too, that there would be nothing to compel the Privy Council to upgrade the degree-awarding powers after the six-year probationary period if there were doubts about a college's ability to manage the complex and difficult business of supporting quality provision in a third-party institution. However, my own view is that the Government have not yet gone quite far enough. Again, I do not think that this is the time to rehearse the arguments at length, but will the Minister think again about a more permanent safeguard against the very substantial risks to quality and perceptions of quality to which the noble Lord referred? I remind the House that franchising powers extend to international provision, which has significant implications for our reputation abroad.
	I am convinced, too, that it would not be in the Government's interest or consistent with the policy aim set out when this Bill was first published if foundation degrees became a signature FE qualification, with a small number of large colleges franchising provision in smaller colleges on a large scale, with the possible result that for reputational reasons, higher education institutions no longer wanted to offer the qualification themselves.
	I add my thanks to the Minister and his colleagues in another place for the way in which they have helped us through this Bill and conducted very detailed consultation with all those of us who remain and have been concerned about the Bill. I add my thanks to those of other noble Lords.
	My Lords, the Further Education and Training Bill presents the first major opportunity in seven years to debate legislation that concentrates on learning and skills. It builds on the very welcome commitment that this Government have shown to our further education colleges and the work that they do. This commitment has been richly rewarded with overall success rates in colleges rising from 59 per cent to 72 per cent between 2001 and 2004.
	The most important proposal in the Bill is to allow colleges to award their own foundation degrees rather than having to do so via a university. I am delighted that the Government have decided to recognise the excellent work that colleges do in the provision of higher education. Let us face it—without colleges, the 50 per cent target for young people in higher education could not be achieved. I am sure the House will recognise that foundation degrees have been an excellent addition to the range of qualifications available.
	Most colleges are working extremely successfully with universities in providing foundation degrees and will probably have no desire to break away from those relationships. In fact, colleges have collaborated with schools, employers and universities for years and this will always remain their first instinct. For instance, the City of Wolverhampton College is working with the University of Wolverhampton to provide foundation degrees for 96 students this year. These cover six different areas, including community health and social care, engineering and broadcast journalism. The businesses they work with range across the public and private sectors to include Goodyear, Turner Powertrain, the Express & Star and Sandwell Hospital. The college is certain that foundation degrees have been a great success and envisage that the close working relationship with the university will continue as they seek to develop more foundation degrees. However, it is important that, where they need to, colleges, including the City of Wolverhampton College, are able to apply for their own right to award foundation degrees.
	I am delighted that this House agreed to what was Clause 19 without a vote on Report and that Peers agreed that the government amendments were helpful additions to the Bill. I am sure that there will be further discussions but the important principle should remain—that colleges with the necessary expertise and experience should be able to apply for foundation degree-awarding powers.
	With regard to another controversial aspect of this Bill on Report, the House took the decision to delete Clauses 17 and 18, which would have given the Learning and Skills Council and the Welsh Assembly Government power to dismiss senior postholders in colleges. I know that my noble friend the Minister will be disappointed with this decision, although I indicated the strength of concern about these proposals to my honourable friend the Further Education Minister in another place at a meeting of our All-Party Parliamentary Further Education Group before the Bill was introduced in this House. These arguments were well rehearsed in Grand Committee and on Report, but I add my own brief thoughts.
	The Secretary of State currently has the power to remove members of college governing bodies under the Further and Higher Education Act 1992. This Bill transfers these powers to the Learning and Skills Council but also adds to the powers by allowing the LSC to dismiss senior college postholders.
	The Government seem to have an enthusiasm for transferring their responsibilities to quangos such as the Learning and Skills Council. I ask this more in sorrow than in anger but why, when we campaigned so hard for so many years to get back into government, are we handing over so many responsibilities and key decisions to people with no democratic accountability?
	In saying this, however, I would not be completely enamoured with the idea of the Secretary of State having a power to dismiss a college principal or other senior postholder. Of course, he has a responsibility to ensure that taxpayers' money is well spent, but a lot of money also goes into other areas of the public sector too. For example, should we expect a proposal for the Secretary of State to dismiss university vice-chancellors? I think not.
	A relevant paragraph of the further education White Paper has been quoted before in this House but it is worth quoting again:
	"A college, led by its governing body, is responsible for determining its own mission, managing its own affairs, meeting its statutory responsibilities and managing its own performance".
	I agree with that. If and when Ministers bring forward amendments to replace the clauses that this House deleted, I ask that they address the concerns that noble Lords have raised. In particular, we must avoid passing bad law which results in the only winners being lawyers.
	In conclusion, I ask noble Lords, if they have not already done so, to visit their local further education and sixth-form colleges to see their excellent and often unsung work. Colleges truly do change people's lives. In Wolverhampton, I have seen lives literally transformed by the local college—mothers returning to work, youngsters who failed their GCSEs returning to education, adults achieving a lifetime ambition of running their own business, and more personal fulfilment than in any other area of our education system.

Lord Adonis: My Lords, there are occasions in life where absence is more eloquent than presence, and I took the absence of the noble Lord, Lord Dearing, to indicate such wholehearted agreement with the Government in their endeavours in this area that he did not even feel the need to be present to move his amendments. However, the noble Baroness, Lady Darcy, stepped in at the last moment to ensure that we could have this debate and I was not able to get away with the Third Reading taking only 10 seconds—which was my expectation at the beginning.
	First, I echo the tribute made by my noble friend Lord Bilston to the work of the further education sector, which does absolutely outstanding work in communities up and down the country, and this Bill will enable that sector to flourish still further. I also pay tribute to the work of the noble Lord in the further education group in this House, which does a great deal to raise the flag for further education. I reciprocate the compliments and thanks given to the Government by the noble Baroness, Lady Morris, on behalf of her and her colleagues, and to the noble Baroness, Lady Walmsley. The three parties have been engaged in a highly constructive process to get the best legislation we can to enable our further education colleges to develop their missions to serve more effectively their local communities. I thank other noble Lords, including the noble Lords, Lord Dearing and Lord Sutherland, and my noble friend Lady Warwick, who wears a double hat in these debates. She sits behind me in more senses than one, watching what I do in relation to reforms that affect universities, and she very properly safeguards their interests vigilantly.
	I shall divide my remarks into two and speak first on articulation and progression, raised by the amendments of the noble Lord, Lord Dearing. For many students taking foundation degree programmes, the qualification will represent the first step of a higher education career. It is essential that all students have the assurance that their qualification will allow them to progress onto further, higher-level study; and that is why the articulation agreements that form a core part of all foundation degree programmes are so vital, wherever they are delivered. The draft criteria for foundation degree-awarding powers, which I circulated to the House yesterday, make that very clear.
	Paragraph 30 of section 3 states:
	"Clear routes that facilitate opportunities for successful progression from Foundation Degrees towards another qualification are an important feature of Foundation Degrees. Such routes should be established when Foundation Degrees are validated, and identify the link(s) between the Foundation Degree and other qualification(s)".
	We have given a good deal of thought in response to the earlier debates in the House as to whether there should be a statutory underpinning for progression. In response to the arguments made in our earlier debates, the Government have concluded that a statutory requirement about progression arrangements would be an additional means of building the confidence that both learners and institutions can place in the foundation degree and ensuring that the interests of learners are kept at the forefront. We therefore intend to bring forward a Government amendment in another place to address progression.
	Our aim is to frame an amendment flexible enough to ensure that the criteria are able to evolve over time. It is also extremely important that in adopting this approach we should not inadvertently impose unnecessary restrictions or obligations on institutions. New degree courses are constantly being devised, and some students may not wish to progress directly on to further study once they have completed their foundation degree. We need to take account of that. We would also be concerned to ensure that the amendment does not have a prescriptive effect on the admissions policies of higher education institutions, which are of course independent. We would therefore consult widely on the form of an amendment which underpins progression but which meets the other points I have just made. I hope that this undertaking is sufficient for the noble Lord, Lord Dearing, to feel able to have his amendment withdrawn.
	I turn now to franchising. The proposals on foundation degree awarding powers were amended on Report to enable the Privy Council to specify restrictions on how a further education institution may exercise these powers. One of the restrictions is that a further education institution with the power to award foundation degrees may not authorise other institutions to award foundation degrees on its behalf. The other restriction is that the further education institution may only award foundation degrees to students enrolled at that institution at the time they complete the relevant course of study.
	The revised QAA draft criteria document that I have circulated to noble Lords specifies that if an institution has been granted this restricted category of foundation degree awarding powers, it is unacceptable for that institution to delegate a significant level of provision to another FE institution without foundation degree awarding powers. The revised criteria also make clear that suitably rigorous controls will be in place to ensure the standard of provision wherever it is delivered, and that includes the workplace.
	Only after a probationary period of at least six years, when the QAA is satisfied that an FE institution with degree awarding powers has developed a robust track record in awarding its own foundation degrees, would the QAA be in a position to recommend to the Privy Council that the FE institution's powers be upgraded to include the power to award foundation degrees to students enrolled at other institutions and the power to authorise other institutions to award foundation degrees on its behalf.
	The noble Lord, Lord Dearing, is rightly concerned to maintain high standards while accepting the principle of further education institutions having foundation degree awarding powers beyond the six-year period. During the initial six-year probationary period, an FE institution that is granted foundation degree awarding powers will be expected to establish strong quality-assurance credentials. The QAA will carry out an interim review of the institution's provision during the six-year period, which will give early warning of any possible area of concern. There will of course be a full assessment at the end of the six years of an application for renewal, if one is made.
	This means that the institution will have satisfied quality-control checks at three separate points: during the initial application, at the interim review, and with the application for renewal of the powers. However, let me provide reassurance beyond the six-year period. The QAA will continue to play an audit role in relation to the institution thereafter. If the institution is judged inadequate, it will not achieve a judgment of broad confidence from the QAA. Judgments of limited confidence or no confidence would have very serious and adverse consequences for the institution's reputation. Furthermore, the independent report on the effect of Clause 17, which we have undertaken to publish and lay before Parliament, could consider franchising. We propose to publish draft terms of reference for this report and will be happy to look at suggestions as to how they can be improved, including whether franchising should be a specific term of reference in that review. I stress that the inquiry is now to be independent; we took that decision in response to the point that my noble friend Lady Blackstone made on Report. I confirmed that in my correspondence with her. My honourable friend Bill Rammell, the Minister for Lifelong Learning, Further and Higher Education, is prepared to repeat this commitment on the record in the other place.
	Having said all that, I hope that the noble Lord, Lord Dearing, will feel that his concerns have been addressed. In conclusion, I pay tribute to him personally for all his work to enable a consensus to be formed in this important area.

Lord Kingsland: I am grateful to the noble Baroness for her response. I am also extremely grateful to the noble Lord, Lord Maclennan of Rogart, for his support for the amendment.
	The noble Baroness is correct to say that there are myriad examples in the Bill of a requirement on the LSB to consult. That is true. But the purpose of this amendment is to ensure that the Legal Services Board will consult when it wishes to make an initiative which is not plainly set out in the Bill with a consultation obligation. What lies behind the amendment is the philosophy, which I think is widely accepted in the Committee, that the LSB should be a light-touch regulator. There is real concern that without a general control on its powers of initiative, it may see its task as going beyond light-touch regulation.
	Moreover, there is an important link here with the levy. The Bill has detailed stipulations about how the obligation to pay the levy should be divided between the approved regulators, but there is nothing in the Bill to control the overall scale of the levy. If the Government are going to continue to refuse to insert any sort of control over the overall size of the levy, the only other way in which financial discipline can be introduced upon the LSB in the Bill is through an amendment of this sort—an amendment which to some degree seeks to control activities of the LSB at least to some degree. I therefore urge the noble Baroness to look at the amendment in the context not just of the principle of consultation, but also of all the financial provisions.
	The noble Baroness is not only nodding but nodding and smiling. This combination leads me to the ineluctable conclusion that she agrees with everything that I have said. I hope, therefore, that the implication to be drawn is that she will look again at the amendment between now and Report. She has clearly grasped the reasons for tabling it.

Lord Kingsland: Clause 166 provides for the apportionment of the start-up and running costs of the Legal Services Board and the Office for Legal Complaints. In particular, it gives the Legal Services Board the power to make rules for the imposition of a levy on approved regulators in accordance with "fair principles". As I understand it, the Government intend that the start-up and the full running costs of the new regulatory arrangements should be borne entirely by the legal profession.
	At paragraph 455 of its report, the Joint Committee on the Bill said:
	"We recommend that the Government give further consideration to funding the start up costs of the new regulatory system. We understand that such assurances have been given in respect of Part 2 of the Compensation Bill which introduces a new regulatory regime for claims management".
	It went on to say in paragraph 467 that,
	"if the start-up costs of the new system are to be met through levies and charges on front line regulators, initial costs to the profession will be high and will be met both by practitioners and consumers. This adds weight to the argument that the start up costs of the LSB and OLC should be borne by Government".
	In response, the Government have confined themselves to the solitary assertion that,
	"those being regulated should bear the cost of regulation".
	They have not, for example, sought to explain why different approaches are taken with respect to other regulatory regimes—for example, that pertaining to chartered accountants. Further weight is given to this argument by recent estimates of the scale of start-up costs. They are now estimated at £23.6 million, which is substantially up from the £9 million initially estimated by Ernst & Young in the regulatory impact assessment.
	As far as running costs are concerned, in its so-called simplification plans, which were published in December 2006, the Department for Constitutional Affairs predicted that, after short-term transition costs, there would be long-term annual savings of £9.6 million, of which £6.5 million would accrue to the approved regulators. However, even the department described the figures as,
	"indicative rather than statistically robust".
	They appear to be founded on the rather flimsy assumption that savings will flow from the fact that the cost of complaints handling will no longer be spread over several organisations but,
	"will solely be incurred by a single, independent body".
	The regulatory impact assessment carried out by PricewaterhouseCoopers and published with the draft Bill estimated that there would be only a modest increase in the overall annual regulatory cost. However, that conclusion depends upon assumptions— about efficiency improvements and the absence of increases in the number of complaints assumptions that are plainly open to question. The consequences of the Bill's approach will be especially severe for junior members of the Bar, in particular recent entrants. This is of special concern to the Bar Council, which regards the proposed financial arrangements as exceedingly damaging to the future of the profession.
	There is a particularly powerful argument for modifying the proposed regime where the start-up and running costs cover activities that were formerly those of public bodies—for example, the Lord Chancellor's functions under the Courts and Legal Services Act 1990 and the functions of the Legal Services Ombudsman. In our submission, there should continue to be, at the very least, a taxpayer contribution to start-up and running costs to reflect the costs that would have fallen on the public purse had the present regulatory arrangements been retained.
	Moreover, the Legal Services Board has a wider public interest role than just overseeing the conduct of practitioners; for example, it has a role with respect to access to justice and its responsibilities under Part 5 of the Bill. Why should these costs be borne by the professions? I shall further pursue the points that I have just made under Amendment No. 142.
	The proposed new clause provides for the start-up costs of the new system to be funded by the Secretary of State. The amendments to subsection (1) and subsections (6) to (9) of Clause 166 prevent those costs from being included in the leviable expenditure of the Legal Services Board, the Office for Legal Complaints or the Secretary of State. They also exclude from the net levy a sum representing an estimate of year-on-year costs of the existing public sector machinery. Those amendments would leave ongoing costs incurred by the Legal Services Board, the Office for Legal Complaints and the Secretary of State included in the net leviable expenditure.
	Clause 166(3) requires the apportionment of the levy to be in accordance with "fair principles". The levy should be not only fair but also proportionate to the regulatory burden that any particular approved regulator places on the system. The Joint Committee proposed in recommendation 56 that,
	"levy rules must be fair and proportionate".
	Proportionality is an express principle of other parts of the Bill. There are extremely good reasons for applying it here. The insertion of new subsection (3)(a) into Clause 166 seeks to achieve that. I beg to move.

Baroness Ashton of Upholland: I am grateful to noble Lords for this very important debate on the levy. However, the Government begin by not accepting that they should contribute to the establishment costs or running costs of the board and the OLC, as it has been said they should. I know what the noble Lord, Lord Kingsland, said about the Compensation Act, which I had the privilege to pilot through your Lordships' House, and about the policy for which I was responsible. However, we were creating something entirely new; there had been nothing to base our policy on before. We believe that legal services providers enjoy exclusive access in the provision of reserved legal services, which can lead to them providing ancillary legal services. We hope and expect the profession will gain from the increased consumer confidence that these reforms will generate and that consumers will enjoy greater access to justice when things have gone wrong for them. We hold to the view that the costs should be met by the professions.
	Having said that as our backdrop principle, I understand the concerns that Members of the Committee have raised. The noble Lord, Lord Kingsland, in his previous amendment was worried that there should be a focus on how that cost would be contained and that it did not simply escalate. There is real critical importance in value for money being one of the core principles which must underpin the way in which the implementation process is managed and the future operation of the board and the OLC. We believe that the Bill builds in a number of safeguards to ensure this is the case.
	First, Clause 195 sets out in detail the consultation procedure that the board will have to follow when consulting on rules, including the levy rules. Secondly, Clause 166 prevents the board making levy rules except with the consent of the Lord Chancellor. Thirdly, as we will discuss in due course, following the report of the Delegated Powers Committee, I have brought forward amendments that will see the levy rules subject to parliamentary scrutiny through the negative resolution procedure.
	I hope that I may also offer reassurance to Members of the Committee in relation to establishment costs if I expand on how we expect and anticipate that we will recover the costs incurred. As I have explained, while I believe it is appropriate that the costs should be met by the approved regulators, the mechanism through which this will happen is through the levy and until the board is appointed there can be no levy rules. Therefore, the Government will fund the costs of establishing the board and the OLC, and recover that expenditure once the board has been appointed and is in a position to make the levy rules. To minimise any potential pressure on approved regulators and their members, the recovery of this expenditure will be done on a phased basis rather than in a single year.
	I also want to reassure Members of the Committee that we will continue to involve stakeholders in the implementation process to ensure that they have the opportunity to input and to ensure transparency. On 15 March, my honourable colleague Bridget Prentice is meeting a variety of stakeholders to discuss implementation and how we will continue to engage with them as we take these issues forward.
	The third effect of this group of amendments would define in the Bill, as the noble Lord, Lord Kingsland, said, the fair principles. Amendment No. 142AA sets out to define "fair principles". I could not agree more that it is very important that the board has regard to fair principles when apportioning the levy, which is why Clause 166 expressly includes this requirement. But I am not sure that I agree with the noble Lord that we can define them. We believe it is better that the board considers all appropriate factors and determines how a fair apportionment should be achieved.
	The Committee will know of my aversion to lists in principle, and to not being able to take into account factors that will at the time be very relevant, bearing in mind the numbers and size of regulators and so on. It is important that the board has the discretion to set out the factors it considers appropriate in its levy rules, which will be made by statutory instrument.
	The PricewaterhouseCoopers report began afresh with a bottoms-up approach. It did not seek to identify the processes already operating and to validate the cost of each activity. Instead, it built a completely new cost model for the OLC, which is important and entirely consistent with what we seek to achieve; namely, a wholly new organisation with new procedures, new processes and a new culture, which again we have debated in your Lordships' House. My understanding is that it costed an increase of 25 per cent in the volume of complaints that the OLC might receive, but it also took into account that all authorised persons would have in-house complaints-handling arrangements. The aspiration is for that first port of call to successfully sort out the complaint before it needs to go on.
	Between now and the next stage, I am more than happy to set out in greater detail the costings included in the PricewaterhouseCoopers report and to answer any further questions that would be best dealt with in that way. But I go back to where I began, which is the principle we hold to as we believe it is right; it is not unprecedented, of course. The costs should be borne in the way I have set out, recognising fair principles and enabling phasing in so that the burden is reduced.

Baroness Ashton of Upholland: I had guessed where this amendment might have come from. As the noble Lord has indicated, it is very similar to Amendment No. 33, which we debated on the second day in Committee. As I indicated then, I met with the trademark attorneys and patent agents on 5 February, and was keen to listen to their concerns in respect of proportionality in the Bill, particularly in relation to the proportion of costs that fall upon small regulators. They were very keen to ensure that the Bill should not take a one-size-fits-all approach, and I agree completely with that.
	When we were talking about Amendment No. 33, the noble Lord referred to such considerations as the fact that the extent to which the board acts might discourage entry or retention in the regulated sector, and he returns to that theme again. I agreed then, and agree now, that some of those considerations are extremely sensible. I agreed during that debate that I would envisage the board considering such factors as the regulator's resources, the effect of the fees, and the extent of entry or retention in the regulated sector—which, as the noble Lord has indicated, arise in this amendment.
	I disagree with the noble Lord on the setting out of those considerations in the Bill. If we look at the board's duty under Clause 3 to act proportionately, and under Clause 166 to satisfy itself that the apportionment of the levy will be in accordance with fair principles, we have established, in both those clauses, principles that are not usually—in fact, I do not think they have ever been—defined elsewhere in legislation. We think those principles are established, and would inform the board and ensure that it took into account precisely the considerations the noble Lord has raised.
	I am also keen that the board is able to consider what is appropriate on a case-by-case basis. The trademark attorneys and patent agents felt strongly about that. I would be worried that setting out considerations in the Bill could restrict the ability of the board to consider factors that were appropriate in the particular circumstances that were being faced, if those had not been set out in the Bill. It could mean that the board felt pressure to consider what was in legislation before considering what was actually appropriate according to its rules. It is possible that the board might feel it could only consider what was prescribed in legislation, which would certainly not be in the interests of the bodies we are concerned about.
	We think it is right that the board has the discretion to set out the factors that are appropriate in its rules. Those will be made by statutory instrument, as I have already indicated, and they are covered by established principles. That does not take away from the validity of the concerns of the two bodies that have raised them, nor from our absolute desire to ensure that their concerns are met under the Bill.

Lord Kingsland: I am most grateful for the Minister's reply. To some degree, it may be that the problems anticipated by the trademark and patent attorneys are specific to their profession. Nevertheless, they are a regulated body, and I know the Minister would be dismayed if, as a consequence of the operation of this new regulatory regime, all the things those attorneys fear came to pass. That would be extremely damaging to a thriving profession. The Government must be alert, either in the Bill or in the subsequent regulation, to the particular problems of this regulated group.
	The Minister expressed her hesitation in putting the amendment in the Bill, while accepting that the underlying concern it sough to address was a real one. Would she agree, in the context of the debate on the previous amendment, that Amendment No. 142A adds considerable force to our contention that the word "proportionate" needs to be in the Bill? There are many particular stipulations in this amendment, but the principle that lies behind them is the principle of proportionality. The Minister has a golden opportunity to confront at least some of the problems of the patent attorneys, while at the same time meeting the more general problem that we sought to deal with in discussing the previous amendment to place proportionality in the Bill, thereby at a stroke not only doing much to deal with the general problems but also to help this potentially beleaguered profession.

Baroness Ashton of Upholland: I agree with the remarks of the noble Lord, Lord Maclennan, about the importance of light-touch regulation. I agree that we need to ensure that there is not a propensity for the board to grow like Topsy; we must avoid inflation in the way that the noble Lord described. As I have said consistently throughout our proceedings, I will look again to ensure that we have recognised those issues properly.
	There are a variety of different models to choose from, and I guess that the Financial Reporting Council model applies in this case. I have also been looking at the models that support my case that such organisations should be paid for by the professions. I will not reiterate what I said earlier about the benefits we believe there would be. The different models include the Financial Services Authority and the Financial Ombudsman Service, which is funded entirely by the financial sector. The pensions regulator is also entirely funded by the industry. The funding of Ofcom is split 45 per cent and 55 per cent, while two-thirds of the Financial Reporting Council's funding comes from the sector it regulates. There are different reasons why the funding regimes have been set up in this way. The Council for Healthcare Regulatory Excellence, which has been quoted, is required to be seen to be completely independent of the medical professions. That is why it is funded in that particular way. There are lots of different models. In choosing what to do, the Government have to be mindful of the variety of models and mindful of what they are seeking to achieve.
	I know that I am not going to persuade the Committee of the merits of my case because I already tried to do so in the last amendment. However, we did not consider the matter lightly. We looked at all the different models and talked to those who have a similar regime to the one we propose. We have thought carefully about the best use of government money and resources, and, overall, we believe that the system we have in place for the payments which will be made—regardless of an understanding that it is beyond complaints, which I completely accept—is the right one in the circumstances.
	There may be a principled objection in parts of the Committee, and certainly outside it, about who should pay for something that the Government are doing. But underlying the amendment is an issue about ensuring that the situation cannot escalate to the point where the levy required is unchecked. We believe that we have safeguards in the Bill, not least because we have now agreed that the regulations would come before the other place and your Lordships' House under the negative procedure. As I indicated, I will look to ensure that that is correct. I am afraid that, at this point, we will just have to disagree on the principle. As ever, however, I will continue to think.

Baroness Ashton of Upholland: I was trying to demonstrate the different kinds of financial systems that have been set up and the reasons why they were set up in that way. I am told that there are very particular reasons why the Healthcare Commission had to be that way. The independence of the medical profession in this context is not exactly the same as the independence of the legal profession in the context of the LSB. Of course, I will write to the noble Lord and spell that out properly.

Baroness Ashton of Upholland: I am grateful to the noble Lord for explaining the purpose behind the amendment so succinctly. I understand why he has picked out shareholders specifically in connection with shareholding in ABS companies, ensuring that the involvement of non-lawyer directors does not jeopardise professional duties. I agree entirely with his objective.
	In creating new opportunities to deliver legal services, we must make it clear and beyond doubt that professional duties must apply in the same way as they always have done. This is the key purpose of Clause 169; it places lawyers' duty to comply with regulatory arrangements on a statutory footing. This duty will cover all professional conduct rules and apply not only to individual lawyers but to all companies and firms providing legal services and to all managers and employees of these providers. Moreover, Clause 88 provides further protection. This clause ensures that if a non-lawyer partner, director, shareholder or employee acts in a way that causes or contributes to a breach of professional duties by the firm or its lawyers, that person will be breaking the law. Non-lawyer directors, partners and shareholders may be disciplined by licensing authorities as a result, and may lose any rights to hold shares in the ABS firm, as provided for by Schedules 11 and 13 to the Bill.
	While I agree entirely with what the noble Lord seeks to do, we believe that his amendment is unnecessary, as the Bill already prevents ABS firms and their shareholders or anyone who owes duties to shareholders from acting in a way that conflicts with lawyers' professional conduct rules. Further, a director of a company could not in good faith argue that to break the law as it applied to his firm was to act in the interests of the company and its shareholders. That applies as much to a licensed ABS body, with its particular legal obligations, as to any other. If a company is authorised to undertake only certain activities by being licensed and the terms of the licence require particular forms of behaviour, including compliance with regulatory arrangements, that behaviour is something that all shareholders must accept and support as well.
	I would not wish, by virtue of a provision such as the one proposed here, to cast general doubt on the continuing validity of obligations owed under other law, when it is clear already from the Bill that that this will not be able to operate to adversely affect the ability of regulated persons to comply with regulatory arrangements. In other words, as long as we make it clear in the Bill that there is a statutory duty to comply with professional conduct rules, there is no need for an override provision.
	On that basis, I hope that the noble Lord will withdraw his amendment.

Baroness Ashton of Upholland: I am again grateful to the noble Lord for explaining what he is seeking to do. I shall try to explain the approach that we have taken and the purpose behind these clauses.
	We begin from the principle that the new regulatory framework applies to each of the approved regulators and to their regulatory arrangements. As the body that is responsible for adjudicating breaches of the Law Society's rules of professional conduct, it is essential that the SDT is part of that new framework.
	Clause 171 brings the Solicitors Disciplinary Tribunal within the oversight of the Legal Services Board for the purposes of any changes to its rules that it seeks to make. Noble Lords will be aware that under Section 46(9) of the Solicitors Act, rules made by the tribunal about its practice and procedures must be agreed by the Master of the Rolls. This clause provides that in the future alterations in the tribunal's rules will require the agreement of the Legal Services Board instead. This is in line with a number of other changes we have made in the Bill to the current functions of the Master of the Rolls in relation to the solicitors' profession, the approval of their professional rules and appeals from the SDT.
	It is important to emphasise that the Solicitors Disciplinary Tribunal is a fully independent body. This clause simply brings the tribunal, which is part of the arrangements for regulating lawyers, within the oversight of the LSB. It does not make it an approved regulator. Initially the Joint Committee on Human Rights had some concerns about the impact of this change on the compatibility of the SDT with Article 6(1) of the European Convention on Human Rights. However, in its latest report the Joint Committee now agrees that the transfer of responsibility for rule approval from the Master of the Rolls to the LSB is unlikely to lead to any significant risk of incompatibility with Article 6(1).
	As the noble Lord said, Clause 172 allows for the LSB in restricted circumstances to make a direction. It is important that it has this power, which I emphasise is limited in that it can be used only where the SDT is failing to perform its functions to an adequate standard, or at all—for example, dealing with cases unreasonably slowly. The LSB can direct the SDT only to take such steps as are necessary to remedy the failure. The LSB cannot interfere with the determination of any individual case. It is, if you like, a backstop power. Any direction by the LSB under Clause 31 is subject to the procedure and preconditions in Schedule 7, which include the requirement for the board to obtain the advice of the Lord Chief Justice, whose view in relation to the effect of any direction on the independence and impartiality of the SDT will be of great importance.
	I would be concerned if there was no high-level oversight over the way in which the SDT operates, not in the determination of individual cases but if the tribunal is failing in its functions. For example, if it is operating in a completely inefficient way and is failing to get through cases within a reasonable time as required by Article 6 of the European Convention, it must be absolutely clear that the LSB can step in and direct it to remedy the failure. Without this clause nobody will have that power.
	As I said, the SDT will continue to operate as a self-governing entity. Indeed, the Bill reinforces that independence, giving it greater administrative independence by making clear that it can set its own budget. The LSB will have a role in approving that budget. Our intention here is to allow for the possibility—it is important to emphasise that it is just a possibility, and a rather distant one at that—that if it were failing, the LSB may direct it to take steps. I do not believe that this power limits its status as an independent and impartial tribunal. Clause 173 allows for modifications to be made to its functions by order rather than requiring primary legislation. I would not want there to be any suspicion that this seeks to fetter its independence. I make it absolutely clear at the outset that the modifications to its functions can be made only with its consent—Clause 69 as modified by Clause 173. Nothing can be forced on the tribunal. Therefore, I am confident that its independence will not be compromised by this clause and, as I said, so is the Joint Committee on Human Rights.
	Currently, changes to the tribunal's functions have to be made by primary legislation, which does not give it the necessary flexibility. The intention behind this power is to ensure that it is able to modify its functions as quickly and efficiently as possible to reflect changes in the market for legal services and, as a result, in the jurisdiction it may have to exercise. For example, changes under the new ABS regime may occur quickly and it may need to make relatively quick modifications to its statutory functions to address these changes. The clause allows the modifications to be achieved through a recommendation by the LSB to the Lord Chancellor and with the consent of the tribunal. The modification is then made by order. The order can be made only in the same form as that recommended. The clause will allow the SDT to propose modifications of its functions to the Legal Services Board. The LSB is not bound to accept them, but there is clear benefit in the tribunal being able to make these changes by other means than primary legislation.
	A further insurance against interference is that modifications can be made only for the purpose of enabling the tribunal to perform its role more effectively and efficiently. The tribunal will be the judge of that. I reiterate that it will remain an independent tribunal. Modifications will be made only with its consent. I hope that gives the reassurance that the noble Lord seeks and that he will feel able to withdraw the amendment.

Lord Kingsland: moved Amendment No. 149ZA:
	Schedule 16 , page 218, line 37, leave out paragraph 2 and insert—
	"2 In section 1A (practising certificates: employed solicitors)—
	(a) in paragraph (b) omit "or",(b) in paragraph (c)—(i) omit "by the Council of the Law Society", and(ii) at end insert "or", and(c) after that paragraph insert—"(d) by any other person."."

Lord Kingsland: moved Amendment No. 149ZB:
	Schedule 16 , page 221, line 2, leave out from "certificate" to end of line 8 and insert "if he has been required by rules made under section 34(1) to provide an accountant's report and has failed to provide such a report within the time period prescribed under those rules,"

Lord Kingsland: moved Amendment No. 149ZE:
	Schedule 16 , page 222, line 41, at end insert—
	"( ) in subsection (2) for "six" substitute "nine",( ) in subsection (4) for "six" substitute "nine","

Lord Kingsland: This group of amendments relates to paragraph 15 of Schedule 16. Section 13B of the Solicitors Act 1974 empowers the Law Society to suspend the practising certificate of a solicitor who has been convicted of a serious offence, pending an application against the solicitor to the Solicitors Disciplinary Tribunal. However, in our submission, the power is unduly restricted. It permits suspensions of two successive periods of six months only. A total period of one year to take a case to the Solicitors Disciplinary Tribunal and complete it is increasingly very difficult in many cases, as disciplinary cases become more complex. The amendment seeks to extend both periods of suspension from six to nine months so as to give an extra six months to cover such complex and lengthy cases.
	Section 13B was inserted by Section 94(3) of the Courts and Legal Services Act 1990. It enables the Solicitors Regulation Authority, where a solicitor has been convicted of offences involving dishonesty or deception, or other forms of serious crime, to direct that his practising certificate be suspended for a limited period prior to a full hearing. It is not proposed by this amendment that Section 13B be removed from primary legislation.
	It is accepted that it is important to bring disciplinary proceedings as quickly as possible but, as I have already said, they are becoming more complex. Recent years have seen the Law Society taking action to strike off solicitors who have been involved in such offences as money laundering and bank instrument fraud. The current time limits simply do not provide sufficient time for cases to be prepared properly. I hope that the Government will accept the amendments. I beg to move.

Lord Kingsland: moved Amendment No. 149A:
	Schedule 16 , page 231, line 30, leave out paragraph 40 and insert—
	"40 Section 44B (examination of files) is amended as follows—
	(a) in subsection (1)—(i) for "Council are" substitute "Society is",(ii) in paragraph (b) for "Council" substitute "Society",(iii) omit paragraph (c), and(iv) for "the solicitor or his firm" to end substitute "any person requiring the production or delivery of information in accordance with subsection (2) or apply to the High Court for an order requiring the production or delivery of such information.";(b) for subsection (2) substitute—"(2) A notice by the Society or order of the court under subsection (1) may require— (a) the production or delivery to any person appointed by the Society, at a time and place to be fixed by the Society or the court, of all relevant documents in the possession of that person;(b) the attendance of the person to whom notice is given to provide information by answering questions at a time and place to be fixed by the Society or the court.(3) Subject to subsection (4), a notice under subsection (1) may only be given to or an order made against a person who is regulated by the Society or is connected with a person regulated by the Society.(4) A notice or order under subsection (1) may be given to or made against any person if the Society is satisfied that information relevant to an investigation is likely to be in the possession, custody or power of that person and that there are reasonable grounds for believing that information which may be provided by that person is likely to be of substantial value (whether or not by itself) to the investigation.(5) For the purposes of subsection (3) a person is connected with a person regulated by the Society ("A") if he is or has at any relevant time been—(a) a partner in a partnership of which A is or was a partner;(b) an employee, officer, member, director, agent, shareholder or shareowner of A;(c) remunerated directly or indirectly by A for activity in connection with the provision of legal services;(d) a controller of A; or(e) a member of A's group.""

Baroness Ashton of Upholland: I am grateful to the noble Lord, Lord Kingsland, for raising these issues. We recognised that the powers to require information currently contained in Section 44B of the Solicitors Act 1974 may indeed need to be revised in some way. We have some concerns; for example, the definition of third party is drafted very widely and may subject more people to the statutory obligation to disclose information than may be desirable or appropriate for the purposes of effective regulation. We would like to take the amendment away and consider it further with the Law Society and with the noble Lord, Lord Kingsland.
	Amendment No. 149B does two things. First, it allows the Law Society the power to require production of confidential or privileged information. We do not accept that, because there are real sensitivities in relation to allowing a regulator to over-ride professional privilege or have unfettered access to material of a confidential nature in the way proposed. At this stage, we are not persuaded that the Law Society has made the case for this power. Secondly, the amendment provides for an enforcement provision where production of information has been compelled under Section 44B of the 1974 Act, as amended. That would be achieved by the insertion into that Act of a new Section 44E. We think that there needs to be an appropriate enforcement mechanism for any new power to require information. Section 44E also requires more detailed scrutiny of the new offence that the Law Society has suggested. For that reason, I would like to take away that part of Amendment No. 149B, as well as Amendment No. 149A, continue our discussions with the Law Society and come back to the House at the next stage.

[Amendment No. 149D not moved.]

Lord Kingsland: I shall also speak to Amendment No. 156. The Minister will be relieved to know that these are not about Schedule 16. The amendments concern the definition of "barrister" and the position of the Inns of Court in relation to it. The Inns of Court, the Bar Council and the Bar Standards Board believe that the role of the Inns in calling to the Bar those who exercise rights of audience as barristers should be recognised in the Bill to protect the interests of consumers. Consumers who engage the services of a legal practitioner called a barrister are entitled to know that the person whom they instruct has completed the training and education required by the Inns. The Bill should, accordingly, be amended so that Clause 173 builds on the previous legislation in this area by continuing to provide statutory recognition of the Inns' important role in this respect.
	The four Inns of Court—Lincoln's Inn, Inner Temple, Middle Temple and Gray's Inn—are societies of lawyers which, for more than five centuries, have had the responsibility for educating and training their members, as well as calling to the Bar those members who have qualified to practise. The education and qualification of students and barristers continues to be the core activity of the Inns, bringing together students, practitioners and judges in the communal enterprise of learning excellence in advocacy and legal ethics. Each year, the Inns of Court collectively spend in excess of £6.5 million on education, training and scholarships. In addition, they benefit from both practitioner and judicial members giving freely of their time and expertise to provide education and training. The contribution that they make through their education and training programmes, particularly in advocacy, is unique.
	It is in the public interest that the Inns' role is preserved so that the Bar can ensure that standards are both maintained and enhanced. That will ensure that the public can have confidence that members of the profession will provide the highest-quality legal representation and advice. Both the noble and learned Lord the Lord Chancellor and the noble Lord, Lord Hunt of Wirral, the chairman of the Joint Committee, acknowledged the important work of the Inns of Court in education, training and competence in the Second Reading debate on the Bill.
	Section 31 of the Courts and Legal Services Act 1990, as substituted by Section 36 of the Access to Justice Act 1999, recognises the Inns of Court's role in calling persons to the Bar. Section 36(1) states:
	"Every barrister shall be deemed to have been granted by the General Council of the Bar a right of audience before every court in relation to all proceedings".
	Section 36(3) continues:
	"A person shall not have a right of audience by virtue of subsection (1) if ... he has not been called to the Bar by an Inn of Court".
	There is a strong public interest in amending the Bill in order to recognise that the only people who can call themselves barristers, and practise under that description, are those who have been called to the Bar by an Inn of Court and are therefore subject, and continue to be subject, to training and education in the Inns.
	The proposed new clause would retain the important role played by the Inns of Court set out in the Courts and Legal Services Act 1990. It ensures that a person cannot be authorised to practise as a barrister under the regulatory arrangements of an approved regulator unless he or she has been called to the Bar and, of course, is not disbarred. It also supplies a definition of "barrister" that features in various provisions. By contrast, however, the expression "solicitor" is defined.
	Some of but not all the Bill's references to a barrister are intended to relate to a barrister authorised to practise as such; hence proposed new subsection (2)(b). That will include a person authorised to practise during the transitional period, in accordance with paragraph 6(1)(a) of Schedule 22. I beg to move.

Baroness Ashton of Upholland: That was the most animated debate we have had today. I still struggle with what a bencher is, never mind what a master of the bench would be. I quite fancy the dining—perhaps that should be my research project between now and Report

Baroness Ashton of Upholland: I hope that the noble Lord can organise it. I completely recognise the strength of feeling about the role of education and training. The noble and learned Baroness, Lady Butler-Sloss, talked about it with great passion. The noble Lord, Lord Kingsland, described it as unique. The noble Lords, Lord Neill of Bladen and Lord Thomas of Gresford, and my noble friend Lord Borrie, each have benefited—if I might describe it as such—from the incredible way in which the Inns have developed their role in education and training, and I take the point about dining.
	My noble friend Lady Royall was reminded by the comments of the noble Lord, Lord Thomas of Gresford, of the House of Lords. Conviviality is a fundamental part of being able to strive across the Dispatch Box to achieve what we all wish to see, which is good legislation. I also recognise the role of the Inns in calling and disbarring barristers, currently set out in Section 31 of the Courts and Legal Services Act 1990 in respect of rights of audience. As a result of the changes to the way in which reserved legal activities will be granted in future, we have to repeal that section. The legislation as currently drafted allows flexibility for the Bar Council to make regulatory arrangements maintaining the role of the Inns in calling and disbarring authorised persons. The Government think it very important that the Bar Council, as the approved regulator, has primary responsibility for making the arrangements for the training, practice and discipline of barristers. The detail of the relationship that the Inns have with the Bar Standards Board and the Bar Council is a matter for consideration by those parties and the Legal Services Board when established.
	That said, I understand completely the strength of feeling and the need for more certainty to ensure that the role of the Inns in respect of the calling and disbarring of barristers continues in the future. Perhaps I may therefore take away the amendment of the noble Lord, Lord Kingsland. I ask him to withdraw it and I shall consider how to come back on Report to deal with the issues that have been raised so succinctly by Members of the Committee.

Lord Kingsland: The purpose of encouraging this clause-stand-part debate is to raise the issue of immigration advice, which has not been considered previously in the Bill. The Immigration and Asylum Act 1999 established a new regulatory structure for immigration advice under the auspices of the Immigration Services Commissioner. Despite the fact that immigration advice is clearly a legal service, responsibility for the Immigration Services Commissioner was granted to the Home Office and not to the Department for Constitutional Affairs.
	It was hoped that the Bill might rectify this anomaly, especially as the situation will now become even more curious. The Office of the Immigration Services Commissioner will cede its supervisory role over lawyers to the Legal Services Board, but it will continue in relation to non-lawyer advisers and also, most unsatisfactorily, in respect of any activities which England and Wales lawyers may conduct in other parts of the United Kingdom. The OISC will remain under the supervision of the Home Office while the Legal Services Board will fall under the department's jurisdiction. Given that the provision of advice in immigration matters is, to all intents and purposes, a reserved legal activity, and it is a criminal offence to provide the service without being regulated, why is it absent from the list under Clause 12 and not treated as a reserved legal activity under the Bill?
	Secondly, we have heard from the Government and seen in the Joint Committee report that one of the purposes of the Bill was to simplify the regulatory maze of legal services. Why have the Government, therefore, in attempting to tidy up everything else, left the Immigration Services Commissioner outside the ambit of the Legal Services Board?
	Finally, why should responsibility for the commissioner not be given to the Department for Constitutional Affairs, which is generally responsible for legal services, rather than being left to the Home Office, which would clearly be the potential opposing party in virtually all cases conducted by immigration advisers?

Baroness Ashton of Upholland: Again, I am grateful to the noble Lord for raising this issue.
	Clause 184 maintains the rights and privileges of solicitors preserved under Section 88 of the Solicitors Act 1974. This is a saving provision which recognises, as legislation has done since the 18th century, the low regulatory risks associated with the roles undertaken by solicitors to the Crown and other public departments. This role has always been, and remains, very different from the role carried out by solicitors working in the private sector, either employed or self-employed, since government solicitors, who are already subject to separate regulation, do not generally provide advice or other services to the public or hold client money. Instead, government solicitors provide advice and representation to the Government and not to the public, and the regulatory risk they present is quite different from the risk represented by solicitors providing services to the public. Similarly, the Treasury Solicitor, solicitors to other public departments, the solicitor to the Church Commissioners and the solicitor to the Duchy of Cornwall have distinct roles in advising the State, and the saving in Clause 184 and Section 88 of the Solicitors Act extends to the functions carried out by those office holders.
	It is important to remember that regulation should be appropriate and proportionate—a word that has been used a great deal in this Committee—and targeted where action is needed. The Government provide a comprehensive training and development programme for their lawyers which ensures that they are competent to carry out the duties they are charged with and is therefore appropriate given the context in which they operate. An additional requirement to hold practising certificates serves no additional benefit.
	While the Bar Council was statutorily recognised as a professional regulator of the Bar in 1990, noble Lords will know well that it was not until 1999 that it was empowered to levy a fee for a right to practise. But the question of who is a practising barrister and who requires a certificate remains in the hands of the Bar Council and is not—as in the case of solicitors—a matter of legislative definition. There is, therefore, no equivalent statutory exemption for government barristers, but that does not mean that we should remove the exemption for government solicitors. I therefore reject the amendment and hope that the noble Lord will withdraw it.

Lord Goldsmith: I thank the noble Lord for his kind words of welcome. In responding to the amendment, I should declare an interest both as president of the Bar Pro Bono Unit and as the chairman of the Attorney-General's National Pro Bono Co-ordinating Committee. The committee was formed five-and-a-half years ago and brings together some of the main pro bono organisations in England and Wales, such as the Free Representation Unit and others; the professional bodies—the Bar Council, the Law Society and the Institute of Legal Executives; representatives of the voluntary advisory sector; and educational organisations. I identify those for a purpose, which I shall come to.
	The purpose of the committee is to help to co-ordinate and promote pro bono activities. I should like to take this opportunity to express my admiration and thanks to the many legal professionals and students and those who support them in providing free legal advice and representation. It is not a substitute for public funding for legal services, but it can be an essential adjunct to it for some who would not get through the legal system without expert help which they cannot pay for themselves.
	The clause proposes a change to the law which the pro bono organisations strongly support and I have long believed is necessary. It is promoted with the active support of the co-ordinating committee. I am therefore grateful to my noble friend Lady Ashton for having found the legislative vehicle to bring this before the Committee. I am also glad to have the opportunity to respond to this amendment.
	The genesis of Clause 185 is the practice in our courts that the unsuccessful party is often ordered to pay towards the cost of the other party, but that can apply only where the other party himself is liable to pay those costs. That is the indemnity principle. The effect is that in cases where an order for costs will be made against the losing party but the winning party is represented pro bono, no order can be made. The end result is that the person who benefits from the fact that the legal services are provided free is not the represented party but the other party, who may well be able to pay legal costs and is relieved of the burden of doing so. The purpose of the clause is to remove the anomaly but at the same time provide valuable additional funds to support pro bono work. The purpose of the clause is not that the moneys ordered go to the lawyers who have acted pro bono—they will continue to have acted free of charge—but to go to a charity prescribed by the Secretary of State, who can then effect a strategic distribution of such funds to where it would be of most use.
	Even before this clause was in existence, work had already begun to establish a charitable foundation whose purpose would be to receive and distribute moneys that became available to it to support organisations providing free legal advice and assistance. The Government have that body in mind as the charity to be prescribed, although no decision has been made—nor could it be until the clause became law. The amendments proposed by the noble Lord, Lord Kingsland, would direct those payments instead to a charity selected in a particular case or to the pro bono organisation that happens to be involved in the case. I am not persuaded that the approach suggested would constitute the most effective use; and, more importantly, nor is the committee to which I referred.
	The idea that there should be a single body arose out of consultation with the members of the pro bono co-ordinating committee and I have identified—and now it is apparent why—the organisations represented on it. The advantages of the single-body approach are that the prescribed charity is able to effect distribution of moneys in a strategic manner, taking into account national, regional and local considerations; it overcomes the point that a court is ill-equipped to decide between competing claims of charities or organisations—and it is not appropriate that it should have to do so; and the body that is prescribed will have had no role in the decision to litigate or in the litigation, which will protect it from perhaps being, as was suggested, liable for the costs of the case.
	Giving pro bono organisations a financial interest in the outcome of a case, which was the principal reason put forward by the noble Lord, seems to be a bad rather than a good thing. One would not want pro bono organisations to determine which cases they supported on the basis of which were liable to get them most money. There will be no added layer of bureaucracy that would be caused by the need to sift and assess additional bodies for statutory prescription.
	The noble Lord suggests that this might dampen the enthusiasm of pro bono providers. I am absolutely confident that it will do nothing of the sort. Pro bono work is presently undertaken by practitioners simply because the person receiving the help needs it; that is the incentive, and I do not anticipate that that will change one jot. To date, lawyers have not needed any incentive for being able to direct funds to a particular charity in order to undertake pro bono work.
	I emphasise that if this is carried into law, it will bring new money into pro bono organisations. This is not money that is being redirected to the charity; it is money that is simply not there at the moment. The key point is that the single charitable foundation will be able to ensure that the new money is distributed strategically. That might be done in part—it is for it to decide. It would have regard to those organisations that had, as it were, generated the funds. There is no reason why it should not do so, but that is for it to decide.
	Finally, I reject with as much force as I can the suggestion that somehow this involves subsidising legal aid. I have always made it very clear that neither I nor the organisations regard pro bono as a substitute for legal aid. It is an important adjunct; it will have no impact on the debate about what legal aid should be available for what work.
	I hope that the noble Lord sees why the single-body route is preferred, particularly by the committee to which I have drawn attention, and will feel able to withdraw the amendment.

Lord Neill of Bladen: I move the amendment because of the anxiety that I have come to feel about how we have been dealing with Part 5. To put it briefly, we do not have material evidence on certain key features in relation to Part 5. On one view, you could say that we are really transferring our legislative role to the Legal Services Board and all the licensing authorities; we are just handing it all over to them. More harshly, you could say that we are taking a leap in the dark without having done the necessary work in this area.
	What have we made no attempt to investigate? I have three topics to discuss. First, we have done no work to investigate the fragility of the small firms of solicitors—either high street firms about which the noble Lord, Lord Thomas of Gresford, spoke, on more than one occasion in Committee. Many are in rural areas; others are in small towns. In the past two or three years, they have been losing their legal aid work and their financial condition has become more perilous, or so I believe, on the basis of some scanty evidence. What is their position today? Will they be able to continue cross-subsidising work which does not pay by using fees from more lucrative work? That is what they have done for many years. What will happen when the alternative business structures roll into action? What will be the fate of those firms? The answer is that nobody knows and nobody has investigated.
	I shall cite evidence with which I am familiar that came before the joint committee. I should have said earlier what I have said on every previous occasion; that I was a member of the Joint Committee which looked at the Legal Services Bill before it reached this House. There are certain materials showing the anxiety on the question of the fate of small firms.
	The second thing that we know next to nothing about is the new entrants who will come into this marketplace. Who will aspire to own law firms? The Joint Committee had very little material about this. We heard from the Co-operative Legal Services, which was launched last year as part of the Co-operative Group. It seemed to show keenness in doing this, but we did not hear, as we might have expected, from people with plenty of money—banks, insurance companies or finance houses. We heard a little about the so-called claims farmers, or claims managers, two of whom had gone to the wall and had brought disrepute to the clan. We had absolutely no feel for the degree of enthusiasm out there today. Who will they be, and what will be the motivations of the wealthy people coming in or the money providers? Will they be coming in to make money? Will that be their motivation? Will it benefit the consumer? Will law firms be bought and sold like football teams so that one tycoon sells to another tycoon, no doubt each demonstrating his fitness and suitability?
	There is a third matter which we did not go into. We had no time; we complained about that in the committee's report, to which I have referred on earlier occasions. We got through our work in eight weeks, which was pretty good going from a standing start, knowing nothing about this area. With a team of 12 from both Houses, we managed to produce a report. There were many things that we could not get into in any depth. My third point, therefore, is that we do not have any information about what has been happening in other countries. We had a witness from the Solicitors Sole Practitioners Group who said that the only precedent known to him was New South Wales. That is in volume 2 of the Joint Committee's report on page 218. He said that in America there had been a persistent refusal to go down that route.
	The Lord Chief Justice, the noble and learned Lord, Lord Phillips of Worth Matravers, referred to precedents in the plural in oral evidence at question 310 on page 154. We did not investigate that; we have not investigated any of this material. The other aspect is the way in which we will be regarded as a profession in other countries? We have evidence from only one country within the European Union—Germany. An organisation representing well over 100,000 German lawyers is the federal bar regulator. In German, it is abbreviated to BRAK—the Bundes Rechts Anwalts Kammer. They are all represented by this body. It is perfectly clear from their letter that it would be quite out of the question for German lawyers, for whom independence is an absolutely fundamental, basic provision of their life and being, to belong to the organisations—of the most extreme type—being contemplated; a mixture of professions owned by shareholders who do not themselves play any part in the professional work. In Germany, you can be a shareholder, but you are expected to participate; that preserves the professional commitment throughout the firm. You do not have outside shareholders just having an investment in a firm of lawyers. We recommended, in paragraph 330 of the report, that this called for some reconsideration by the Government, because we believed that they were unaware of this provision in German law. Of course, we have not looked at any of the other systems, and so do not know what the position is there.
	We concluded that we could not form a view on whether the creation of these business structures would reduce or increase the number of access points, but we thought that there was an issue. We were,
	"persuaded by some of the evidence suggesting that the reforms may reduce geographical availability".
	Of the witnesses we saw, the Master of the Rolls, Sir Anthony Clarke, was not at all clear how it was going to work out in practice, in question 310:
	"It is very difficult to see how this suggestion is going to improve access to justice".
	The Lord Chief Justice was equally uncertain at question 306.
	We then had evidence from the Legal Aid Practitioners Group, which consists of some 600 members: the small firms and high-street solicitors. Their view, expressed in paragraph 9 of their memorandum on page 131, was one of grave apprehension about the consequences of introducing this new scheme. The Solicitor Sole Practitioners Group had 100,000 members, and expressed a similar anxiety.
	I shall refer to one or two observations made in this House, because I know your Lordships will want to proceed quickly this evening. I remind your Lordships, once again, of what the noble and learned Lord, Lord Woolf, said:
	"For the reasons given by the noble Lord, Lord Kingsland, which were indicated by the Joint Committee, this is an untried situation. Anyone who has in recent years had the responsibility of travelling around the country in the interests of the administration of justice and access to justice knows that there are real problems with the availability of legal services in the country as a whole. That is particularly true in parts of Wales, where I have heard much from high-street solicitors.
	"There is no doubt that large businesses could provide legal services in a novel and interesting way. But that could—unintentionally, perhaps—have a devastating effect on those who have traditionally provided services in rural areas in particular. Great care has to be exercised to see that damage does not occur".—[Official Report, 23/1/07; col. 1057.]
	The noble Lord, Lord Thomas of Gresford, spoke about this on the same day, and the problems of Wales in particular. The noble Lord, Lord Whitty, who is unfortunately not here today, said that he was particularly concerned about the effects in rural areas. That does not mean that he wanted to put a break on everything, but he felt real concern about how these arrangements would work out in these vulnerable areas.
	The noble and learned Baroness, Lady Butler-Sloss, said :
	"I spend quite a lot of my time in the West Country, which is a rather less well off area of England where the absence of legal aid is hitting quite hard. The effect of the ABS firm may be quite dramatic in an area such as that".—[Official Report, 6/2/07; cols. 631-32.]
	The noble Baroness, Lady Carnegy of Lour, had a similar concern about her part of Scotland—which is, I suppose, off our territory. It was interesting to hear her say that the arrival of a large alternative business structure "might wreck the system".
	The noble Lord, Lord Carlile of Berriew, who is not in his place, said :
	"There is a great deal of nervousness in rural areas—the situation in north Wales and mid-Wales is replicated in North Yorkshire, Cumbria and many rural parts of the country—about the effect of liberalisation of the market".—[Official Report, 6/2/07; col. 632.].
	What is there to put against that? What have the Government come back with? We expressed these anxieties in our report, but they have come back with nothing. On 6 February, the noble Lord, Lord Hunt of Wirral, said:
	"I do not believe that the Government have ever responded adequately to the Joint Committee's concerns".—[Official Report, 6/2/07; col. 631.]
	In a similar vein, the noble Lord, Lord Maclennan of Rogart, said at Second Reading:
	"The rural issue has been raised, but I do not think that it has been answered".—[Official Report, 6/12/06; col. 1202.]
	My amendment asks the Government to take away Part 5 and let us have a serious report by a research body that will deal with the various aspects that I have been talking about. This House prides itself on the diligence with which it scrutinises legislation. There is no doubt that a theme in the two-day debates that we will be having next week will be that the House has special skill, zeal and rigour. Here is an example of where we should be applying them.
	My amendment does not halt the Bill. The Bill goes forward, but there cannot be a commencement order bringing in Part 5 until we have had a report, considered it in both Houses and followed another procedure set up under the Criminal Justice Act, which the noble and learned Lord the Lord Chancellor has in one of his proposals in the amendments we looked at today. There has to be another stage when the draft of the commencement order is brought before the two Houses, considered and approved. Noble Lords may pick up details and criticise my method, but my proposal is that we put a brake on the implementation of Part 5 until we have done some basic work in an important area that goes to the heart of protecting consumers. I beg to move.

Baroness Butler-Sloss: I strongly support the noble Lord, Lord Neill of Bladen. I shall deal with points that the Committee has heard me on before. The noble Lord, Lord Neill, has already referred to them: the question of access to justice and the rights of individual consumers. We have already heard of the fragility of small firms of solicitors, which will become even more fragile under the new scheme. That raises the real possibility of an adverse effect on the consumer if those small firms do not survive. Will the new types of firm be prepared to take on unprofitable, difficult and time-consuming litigants who are none the less entitled to consideration as consumers? At Second Reading, we heard that there are already areas, and may well be even more, where certain sections of the public who need, and are entitled to, help from solicitors already do not find solicitors within an acceptable radius of where they live. Whether in small or medium-sized towns or in certain rural areas, the consumer will be the loser if there is not serious reflection and investigation about how Part 5 will work.

Baroness Ashton of Upholland: I understand entirely what the noble Lord, Lord Neill of Bladen, seeks to do, and I pay tribute to the enormous amount of work that I know he did on the Joint Committee. He once again reminded us that it sat for only eight weeks, but it clearly successfully gave us a very important report on which the Government have acted in most places, if not all. I am extremely grateful to him.
	I do not disagree with the sentiment that lies behind the amendment, nor, indeed, with the concerns that noble Lords have raised, particularly around small firms and rural communities. Noble Lords will know Sir David Clementi, when talking about rural services, said that the benefits of new service providers,
	"are not only that they can bring about lower costs; it is also that through longer opening hours, sophisticated telephony and advanced customer care skills, they may be able to offer consumers better access to certain other types of legal services".
	So I completely accept the issues around rural communities and, indeed, poor communities. I do not, obviously, accept what has been said about how the Government approach this. I am reminded though, in terms of other services we provide for our poorer and more vulnerable communities, that actually one tries to provide the highest quality service one possibly can. That can be provided by the local small supplier, but sometimes it can be provided because you are able to encourage others to come in, invest in the area and provide more sophisticated services that provide greater benefit. I have nothing against the sentiments behind the amendment, and I have striven throughout our discussions on Part 5, which I shall not repeat again, not least because of the lateness of the hour and the fact that noble Lords have heard them well enough, to stress that there are really important issues to be addressed in the context of how this is rolled out.
	The question for me is whether the amendment would help us to deliver most appropriately. For me, it would not. There is a real question of how we would do significantly more research. The noble Lord, Lord Neill of Bladen, asked specifically about this. We have research from Australia, and I gather that we have more information on other countries. Perhaps I can send that to the noble Lord and put copies in your Lordships' Library, as well as copy it to all noble Lords who have spoken in this debate, so that it informs better the information that we currently have.
	I have sought to address the concerns that have been expressed by considering a number of things as I have gone through the Bill. Licensing authorities need to satisfy themselves about the range of safeguards and so on. I agreed to see whether we can strengthen the relevant arrangements in the Bill. I have undertaken particularly to look at the whole question of how we might monitor what has happened. The noble Lord, Lord Kingsland, tabled an amendment that was very helpful to our discussions on Part 5 and which I have said I want to think about and see what we might do.
	We believe that in practice licensing authorities are very likely to take a step-by-step approach to ABS, for all the reasons that your Lordships have quite reasonably given and for the reason that we wish to see this being developed properly. We also know that the requirements in the legislation can place conditions on ABS firms and can say, in effect, "Sorry, but you have not provided proper services appropriately". They can also specify that ABS firms must deal with the sort of litigant described by the noble and learned Baroness. We should not, however, think that we can continue to do endless research and come up with any more information than we currently have. We now need to consider in a measured way what has happened and think about the monitoring arrangements. I completely accept that we also need to ensure that we have dealt with access to justice and so on appropriately. I have already begun to spend some time thinking about how we might do that. I have no difficulty with the assumptions that underlie the noble Lord's amendment; we are arguing merely about how we get there. For me, it is about moving on in a measured way and having hard evidence about what has actually happened in order to take the decisions that we indicated we would take in Part 5. So although I understand what the noble Lord is seeking to do, I hope that he will withdraw his amendment. I will consider all the issues on Report that I already indicated I would consider.

Lord Neill of Bladen: I thank those who have lent support to what I have said, from which I received encouragement. I am grateful to the Minister for the courteous way in which she received my proposal, although she will not be surprised if I am not bowled over by the closing five minutes of her remarks. In effect, she does not accept what I propose. The idea that I, and perhaps the Library, see the legislation that would have been relevant months ago is not very satisfactory. Members of the House may think that all is well and that what we are doing is in accordance with what happens elsewhere. Of course, it is not. It may be done in New South Wales but, so far as I know, it is not done anywhere else. I will, however, gratefully read what she sends me, and I will keep an eye on what transpires between now and Report.

Lord Kingsland: Amendment No. 157A would remove the transitional provision that allows the Lord Chancellor to appoint an interim chief executive of the Office for Legal Complaints.
	The Bill sets out a sequential and ordered process for the appointment of the chair, members and chief executive of the Legal Services Board. They will in turn determine the composition of the Office for Legal Complaints and the appointment of its chair. As this process has been prescribed, we would argue against the need for the inclusion of an interim chief executive, as provided for in Schedule 22. The structure, processes and service standards of the Office for Legal Complaints should be for the first chief ombudsman to determine with assistance from other members.
	We cannot see any benefit in appointing an interim chief executive in the short time that it should take between the formation of the Legal Services Board and its appointment of the Office for Legal Complaints' members—which should certainly be one of the first tasks that it undertakes. The fear must be that the establishment of an interim chief executive would give the Legal Services Board the unwelcome opportunity to delay its appointment of the members of the Office for Legal Complaints. This is a possibility that we do not wish to facilitate.
	Furthermore, if there must be an interim chief executive, we would question whether it is appropriate for the noble and learned Lord the Lord Chancellor to make that appointment. There is no mention of any consultation he must make or approval he must seek, which must again raise questions over the independence of the Office for Legal Complaints. If the noble Baroness is keen to press for an interim chief executive, we would certainly seek some assurance over the appointment process. Would there be open competition for the position? How would that be ensured? Would the noble and learned Lord be required to consult at all? I beg to move.

Lord Thomas of Gresford: We fully support this amendment. We do not see why an interim chief executive should be appointed who,
	"may incur expenditure and do other things in the name of and on behalf of the OLC from the beginning of the first interim period",
	until such time as "the OLC determines otherwise". That really means that all the decisions about appointment and offices can be made by a temporary chief executive.
	Schedule 15 sets out the membership and so on for the Office for Legal Complaints. Paragraph 21 states:
	"During the initial 5 year period, the OLC must not acquire or dispose of an interest in land, except with the approval of the Secretary of State ... The initial 5 year period is the period of 5 years beginning with the day on which the appointment of the first Interim Chief Executive ... takes effect".
	That means that the interim chief executive can buy the office and set up the staff, and nothing has to happen for five years, which is the interim period. That is wrong. Surely, when it is set up, an organisation such as the Office for Legal Complaints should choose its chief ombudsman or chief executive and that person should make the important executive decisions along the lines that I have mentioned. Therefore, this interim chief executive is a person who should not exist. We agree with the noble Lord, Lord Kingsland.

Baroness Ashton of Upholland: Perhaps I may explain how the interim chief executive will operate. Someone has to make decisions and the word "interim" does not suggest that the person will be somehow less able to carry out these functions than would otherwise be the case. The question that we had to ask ourselves is this: bearing in mind the length of time that it will take to make all the appointments necessary to set up the organisations, how do we make sure that the transition begins in a seamless and appropriate way? We want someone of extremely high calibre to come in during the interim precisely because ultimately the responsibilities will fall elsewhere and a chief executive will be appointed. In the mean time, it is appropriate to appoint someone to get on with sorting out the basic tasks that need to be done.
	I agree wholeheartedly with the noble Lord about IT systems. We would not appoint someone who did not know how to approach this. They will have the skills and qualifications to know how to seek advice on IT and how to organise the suppliers and so forth. That will be an important part of their functions, which is why I highlighted it specifically. However, the interim chief executive cannot appoint the ombudsmen or make the scheme rules.
	We have said that directions will be issued initially by the Lord Chancellor and then, once appointed, the board. In reality, we expect the interim chief executive and the board to be appointed at roughly the same time. As a consequence, the interim chief executive will be subject to directions issued by the Lord Chancellor only for a very short period, if at all. We have developed the timetable for the appointment of the board and the interim chief executive in discussion with people in our department and officials involved in establishing other organisations, including the Judicial Appointments Commission. As I said, they will be subject to directions issued by the Lord Chancellor because we need to make sure that we have accountability. Other independent appointees are subject to directions issued by the Lord Chancellor, too, not least under Schedule 8 to the Access to Justice Act, which enables the Lord Chancellor to give directions to the Legal Services Complaints Commissioner.
	The board's oversight also mitigates any risk that the incoming OLC and the interim appointee's successor, who will be permanent, may want to move in a different direction and thus unravel the efforts already made. That is because, following the transition period, the board will continue to have oversight of and be able to hold to account the OLC. The continuity of board appointments and the work of the interim chief executive will ensure that the organisation continues to move in the right direction.
	Again, we have consulted stakeholders, who are broadly content because these provisions enable us to get the body up and running as soon as possible. The five-year period in the land disposal clause is not connected to the period for the interim chief executive. The OLC, and no one else, will determine when the interim chief executive's appointment will end.
	We are doing this in order to get things moving in the manner that I have described: HR policy, pay structures, pension provision and so forth. We want someone to get on with that side of the work, who will not be involved in the critical appointments of ombudsmen and, ultimately, not be involved in the long-term direction of the organisation, but who will have a link to the board, which will be appointed at approximately the same time, enabling the Lord Chancellor to give directions to bridge what we hope will be a short gap between the appointment of the interim chief executive and the board itself. We can then move in the right direction. I hope that this has given some comfort to the noble Lord and that he will feel able to withdraw his amendment.